1976 (7) TMI 32 - HC - Income Tax

Summary

Issues:
- Whether the Tribunal erred in not allowing the applicant to raise additional grounds regarding a specific amount.
- Whether the additional grounds of appeal should have been permitted by the Tribunal.
- Whether the discretion vested in the Tribunal was judicially exercised in rejecting the application to raise additional grounds of appeal.

Analysis:
The judgment pertains to a case where the assessee, a registered firm, claimed certain deductions and loss in its business income computation. The Income-tax Officer disallowed the loss and some allowances, which was upheld by the Appellate Assistant Commissioner. The assessee then filed a second appeal before the Appellate Tribunal challenging the disallowances. During the appeal hearing, the assessee sought to raise additional grounds related to a sum of Rs. 7,93,837, arguing it was a capital receipt and not a revenue receipt. However, the Tribunal rejected this application to raise additional grounds, stating that the facts supporting these grounds were not in the assessment order or previous appeal orders. The Tribunal found it impossible to consider these new grounds without fresh investigation of facts at the second appeal stage.

The assessee contended that the Tribunal erred in not allowing the additional grounds, arguing that the Tribunal only needed to refer to the order in a separate case involving Jalan Trading Co. Private Ltd. to permit the new grounds. However, it was highlighted that the assessee itself initially treated the amount as a revenue receipt in its return, and the plea that it was a capital receipt was not raised before the lower authorities. The judgment emphasized that without any material or plea before the Income-tax Officer or the Appellate Assistant Commissioner, the Tribunal could not find fault with their decisions.

The judgment distinguished a previous case where a plea of set-off could be decided based on existing facts, unlike the current situation where the new grounds required additional material not present in the record. Ultimately, the court answered the referred question in the negative, indicating that the Tribunal's decision to reject the application to raise additional grounds was upheld, and the assessee was directed to pay the costs of the revenue.